Oracle 2015 Annual Report Download - page 43

Table of Contents
technologies that add to, are complementary to, or have otherwise enhanced our existing offerings. We expect to continue to acquire companies, products, services
and technologies to further our corporate strategy.
We have three businesses that deliver our application, platform and infrastructure technologies: cloud and on-premise software, hardware and services. These
businesses can be further divided into certain operating segments (Note 16 of Notes to Consolidated Financial Statements, included elsewhere in this Annual
Report, provides additional information related to our operating segments). Each of our businesses and operating segments has unique characteristics and faces
different opportunities and challenges. Although we report our actual results in U.S. Dollars, we conduct a significant number of transactions in currencies other
than U.S. Dollars. Therefore, we present constant currency information to provide a framework for assessing how our underlying businesses performed excluding
the effects of foreign currency rate fluctuations. An overview of our three businesses and related operating segments follows.
Cloud and On-Premise Software Business
Our cloud and on-premise software business, which represented 78%, 77% and 76% of our total revenues in fiscal 2016, 2015 and 2014, respectively, is comprised
of three operating segments: (1) cloud software and on-premise software, (2) cloud IaaS and (3) software license updates and product support. On a constant
currency basis, we expect that our cloud and on-premise software business’ total revenues generally will continue to increase due to continued demand for our
software products, expected growth in our cloud and software license updates and product support offerings, including the high percentage of customers that renew
their software license updates and product support contracts, and contributions from our acquisitions, which should allow us to grow and continue to make
investments in research and development.
Cloud Software and On-Premise Software: Our cloud software and on-premise software line of business markets, sells and delivers a broad spectrum of
application and platform technologies through our SaaS and PaaS offerings, which are certain of our software applications and platforms that are delivered via a
cloud-based IT environment that we host, manage and support, and through the licensing of our software products including Oracle Applications, Oracle Database,
Oracle Fusion Middleware and Java, among others.
We believe the comprehensiveness and breadth of our SaaS, PaaS and on-premise software offerings provides greater benefit to our customers and differentiates us
from many of our competitors that offer more limited or specialized software offerings. Our SaaS and PaaS offerings are designed to be interoperable with one
another, thereby limiting the integration and tuning of multiple cloud applications from multiple vendors. Our SaaS and PaaS offerings are designed to deliver
secure data isolation and flexible upgrades, self-service access controls for users, a Service-Oriented Architecture (SOA) for integration with on-premise systems,
and a high performance, high availability infrastructure based on our infrastructure technologies including Oracle Engineered Systems. Our on-premise software
offerings are substantially designed to operate on both single server and clustered server configurations for cloud or on-premise IT environments, and to support a
choice of operating systems including Oracle Solaris, Oracle Linux, Microsoft Windows and third-party UNIX products, among others. Our commitment to
industry standards results in software offerings that work in customer environments with Oracle or non-Oracle hardware or software components and that can be
adapted to meet specific industry or business needs. We focus the engineering of our products and services to best connect cloud and on-premise deployment
models to enable flexibility, ease, agility, compatibility, extensibility and seamlessness. All of these approaches are designed to support customer choice and reduce
customer risk. Our customers include businesses of many sizes, government agencies, educational institutions and resellers. We market and sell our software
offerings to these customers with a sales force positioned to offer the combinations that best fit customer needs. We enable customers to evolve and transform to
substantially any IT environment at whatever pace is most appropriate for them.
Our SaaS and PaaS revenues and new software licenses revenues are affected by the strength of general economic and business conditions, governmental budgetary
constraints, the strategy for and competitive position of our software offerings, our acquisitions, our ability to deliver and renew our SaaS and PaaS contracts with
our existing customers and foreign currency rate fluctuations. In recent periods, we have placed significant strategic emphasis on growing our cloud SaaS and PaaS
revenues, which has affected the growth of our cloud SaaS and
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